Congress Investigating Ivy League for Antitrust Violations
Credit: CHARLY TRIBALLEAU / AFP / Getty Images- Congressional Republicans are accusing Ivy League universities of collusion and artificially raising tuition costs.
- A letter was sent to every Ivy president detailing potential violations and demanding documentation.
- Concerns include admissions and financial aid policies, along with relationships with the College Board and the Common App.
- The universities have two weeks to turn over relevant correspondence and materials.
It seems everyone wants a piece of the Ivy League these days.
Already facing potential federal funding cuts for abiding antisemitism, maintaining diversity, equity, and inclusion programs, and allowing transgender athletes to compete in college sports, the Ivies now have been targeted by congressional Republicans charging the Ancient Eight with collusion and antitrust violations.
In an April 8 letter sent to every Ivy president, Rep. Jim Jordan, R-Ohio, and Sen. Charles Grassley, R-Iowa, chairs of the House and Senate Judiciary committees, respectively, along with Rep. Scott Fitzgerald, R-Wis., and Sen. Mike Lee, R-Utah, voice their concern that “Ivy League member institutions appear to collectively raise tuition prices while engaging in price discrimination by offering selective financial aid packages to maximize profit.”
These schools, the letter claims, may be guilty of collusion by standardizing admissions policies through the Council of Ivy League Presidents.
And because of their lofty position within the educational firmament, the Ivies “establish the industry standard for tuition pricing, creating an umbrella effect for all colleges and universities to justify higher tuition costs than they could otherwise charge in a competitive market.”
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The letter enumerates various ways these institutions potentially violate antitrust laws, including the use of enrollment management software, algorithms designed to calculate financial aid, and outside agencies such as the College Board and the Common App — in other words, tactics employed by thousands of colleges and universities.
It calls out “binding early decision programs” that “may eliminate students’ ability to receive and compare competing financial aid offers” even though early action policies at Harvard, Yale, and Princeton are not binding.
It also admonishes institutions for requiring residential students to purchase on-campus meal plans, which “undermines consumer choice and restricts competition in secondary markets,” even though such policies are common among many colleges.
What’s more, congressional leaders allege that the U.S. News & World Report college rankings “provide a mechanism for elite colleges and universities to influence standards that drive output down and prices up” by weighing criteria such as selectivity, class size, and resources per student, which incentivizes elite colleges to create a “systemwide artificial scarcity of elite college seats” instead of prioritizing teaching and learning.
And for some reason, the fault lies with the colleges, not U.S. News, while the Ivies are apparently more guilty than other institutions of adjusting their operations to climb the rankings.
For context, the letter references the Justice Department’s early 1990s price-fixing suit against the Ivies and the Massachusetts Institute of Technology that resulted in a consent decree to no longer conspire on financial aid matters.
More recently, many of the Ivies, along with several other elite colleges, were defendants in a class-action suit alleging these institutions engaged in price-fixing and failed to remain need-blind — a stipulation that permitted them to formulate common approaches to awarding need-based financial aid in the first place.
Most of the 17 defendants, known as the “568 Cartel” in reference to the now-expired legislation establishing this stipulation, have settled and agreed to collectively pay more than $300 million in damages.
Another pending class-action suit, Hansen v. Northwestern, claims 40 selective private colleges, including all the Ivies except Princeton, inflated costs by requiring students and families to include financial information from noncustodial parents.
With all this as backdrop, the Ivies now face an intensive congressional investigation promising to expose the inner workings of elite college admissions.
The letter requests that university officials turn over a slew of documents dating from Jan. 1, 2019, to the present.
These include communications related to tuition rates, legacy admissions, early decision programs, indirect cost rates, financial aid, meal plans, rankings, and donor relations, along with correspondence pertaining to the College Board, the Common App, and third-party vendors providing enrollment management services.
Universities were given only two weeks to produce what promises to be a voluminous amount of materials.
Presumably, Congress will then pore over these materials looking for evidence of collusion and price-fixing, mere affirmation of the policies and practices outlined in the letter. Legal action and possible loss of Title IV funding could result, but potential ramifications were not outlined.
Along the way, sensitive information is bound to surface, much as it has in the 568 Cartel case — which is perhaps at least partially why so many universities have opted to settle claims in that suit. The congressional letter does allow institutions to redact students’ identities to protect their privacy.
Until now, much of the punitive activity aimed at elite higher education has focused on individual schools, resulting in full capitulation in Columbia University’s case and defiance from Harvard University and Princeton University.
Will this concerted attack on the wealthiest and, arguably, the most influential group of American universities trigger a collective defense of institutional autonomy? Or will the Ivies cower under the threat of legal action and cooperate fully?Expect the latter, but wouldn’t the former tack be so much more enjoyable to witness?